promoted by Rosi
Job one of the governor after Sandy, or of any governor really, is to lead long-term Post-Sandy recovery and to rebuild wherever it makes sense environmentally and economically. Regardless of what the other secular trends are in the state and what the key policy requirements are, a failure to recover from Sandy puts the entire state economy at risk.
I learned today that the LBI Region, or Southern Ocean County, alone contributes $1.2 billion dollars to the state economy from tourism and that 20,340 jobs are directly supported by visitor commerce there. Ocean County as a whole contributes $3.9 billion dollars to the state from tourism related activities. The LBI Region alone contributes $300 million in tax receipts from tourism related activities and about $66 million of those taxes flow directly to the state. About 13% to 14% of Ocean County jobs in total are attributable to tourism. Tourism and hospitality is the third largest economic sector in Ocean County behind government and healthcare.
NJ Tourism in general contributes $38 billion dollars to the New Jersey economy and provides 386,000 direct jobs and a total of 486,000 jobs once indirect jobs are included. New Jersey tourism generated $4.4 billion in state and local taxes in 2011 and $4.8 billion in federal taxes for the same period.
What these learnings highlighted for me is the importance of understanding the NJ economy from a sector perspective and how the application of competitive strategy principles to our state’s economy is needed if we want to rebuild and grow a strong economy that supports a strong middle class while providing both opportunities for business creation and new paths to the middle class.
As most of us know NJ’s key economic sectors in pharma and telecomm have been seriously eroded and there’s no evidence that the outflow of pharma, biotech, telecomm and general ICT related jobs will end anytime soon. Even with the too little, too late higher education bond passed in 2012 to mask a quarter century’s worth of neglect of Rutgers and NJ’s higher education system, it may be too late to stem the outflow — but we can try and we can attempt to build an entrepreneurial culture, as well as tech and biotech ecosystems across the state. However, these are long-term efforts that require not only investment in intellectual capital and knowledge infrastructure at places like Rutgers, but planning, transportation and community development activities that incorporate creative class wants and needs. The consumer products sector and the Asian consumer electronics firms that have long been key contributors to the North Jersey economy have also been weakening and this situation needs to be addressed as well.
A sector approach to economic growth would enable NJ leaders to focus business creation, long-term Sandy recovery efforts and job growth in key sectors that reflect key NJ competitive advantages that are not easily replicated or dislodged by other states.
An economic sector and competitive strategy approach easily allows for the identification and prioritization of economic sectors that take advantage of core NJ geographic, historic and competitive factors.
Three NJ economic sectors that are easily identifiable using this approach are the $38 billion dollar tourism industry, the $1 billion agricultural industry, exclusive of the $1.1 billion NJ equine industry (that’s $2.1 billion from crops, livestock and horses), and the $2.3 billion dollar gaming industry — which needs to be retooled because of new competition from other states.
The total combined Ag & Food sector in NJ is estimated to have $82 billion in sales and employ 400,000 people or 14% of NJ’s work force.
These three core sectors contribute over $100 billion dollars annually to the NJ economy. They are all based on core NJ geographic and historical attributes and are not easily replicated in other places. Each of these sectors can drive other sectors such as local or regional food processing businesses and can provide entry-level, minimum wage, seasonal and middle class wages across the supply chains associated with each sector.
It’s no secret that I’ve been an advocate for a more robust NJ agricultural sector that plays a critical role in emerging bioregional food systems and new food processing businesses. By spurring growth in these sectors we can buy some time to figure out how to retool NJ’s knowledge-intensive economic sector and mitigate the slow evolution of NJ into a giant bedroom community for New York and Philadelphia.
Tourism, Agriculture and Gaming also provide solid opportunities for both business creation and job growth that addresses the needs of a broader variety of NJ citizens than the real estate, construction and corporate office jobs trifecta that currently dominate NJ economic thinking.
The links below highlight some of my own thinking on this issue over the last few years.